Bernie Sanders’ single-payer plan is fanciful, and portends a political mistake by the Democrats.
“MEDICARE FOR ALL” is a clever euphemism. Opinions of Medicare, which gives generous health-insurance plans to older Americans, are quite positive, second only to Social Security. Noticing this, the ever-keen Vermont Senator Bernie Sanders spun many a yarn during the Democratic primaries, painting an evocative picture of greedy corporatists profiting off the ailments of vulnerable Americans. His solution to the morass? A government-funded (i.e. “single-payer”) health-insurance scheme, providing every American citizen free health care. Think of it like Medicare—but for all.
Mr. Sanders’ logic is by design easy to follow and goes something like this:
Health care is a right.
Costs ought never to prohibit anyone from receiving the care they want.
We lead the world in health-related expenditures, at 17% of G.D.P., while achieving inferior health outcomes compared to other developed nations.
Private health insurance is too often cost-prohibitive, and thus, we have for years been infringing upon Americans’ inherent right to health care.
Therefore, a publicly funded, single-payer program, possibly modeled after Medicare, is the only way to ensure (1) and (2) while tamping down on (3).
It’s a compelling argument. Barack Obama’s attempt to reform the health-care system, interchangeably called the Affordable Care Act (A.C.A.) or Obamacare, has proven middling in its impacts, a moderate net positive. Conservative huffing aside, Obamacare neither decimated American health care nor radically overhauled it.
Yet many on the left feel Mr. Obama’s eponymous health law was not sufficiently ambitious; some, like the emphatic former Labor Secretary Robert Reich, go so far as to argue the A.C.A. capitulated to health-services industry fat cats. Under attack from both left and right, Obamacare’s promise of a market-oriented fix to the health-care system has lost much of its impetus. In contrast, Mr. Sanders’ single-payer push looks fresh and encouraging.
But his argument is misguided. Start with his most fundamental premise: that health care is a right for all. We agree. This does not imply, however, that health insurance is a right. At the most bare-bones level, we already provide universally accessible health care via guaranteed admission to hospitals. The issue, of course, lies in the severe financial penalties incurred thereafter. But that is not a matter of rights; it is one of public policy. America must therefore choose how it will allocate its resources, and those choices will necessarily include trade-offs. It does not logically follow that a particular set of choices and trade-offs, single-payer being one such set, is any better than another, say Obamacare, simply because health care is a right. This part of the argument thus fails on logical grounds.
Move next to Mr. Sanders’ second premise. In terms of good policy design, reducing the extent to which costs prevent patients from receiving care is undoubtedly a desirable outcome. On this front there is bipartisan unanimity. What is less agreed upon, though, is how best to reach that goal. Mr. Sanders believes that since single-payer would obviate or sizably reduce out-of-pocket costs, it is the most direct way to rid us of prohibitive medical expenses.
But he is blind to the trade-offs. Funding a program of that nature would demand significantly higher taxes on both the rich and the middle class. Look no further than Mr. Sanders’ home state of Vermont, where a single-payer push failed in no small part due to proposed hikes to the payroll and income tax rates, 11.5% and 9.5% respectively. Aside from their political unpopularity, major tax increases harm economic growth, as a large body of economic evidence demonstrates. Lower economic growth means lower wages for workers or even unemployment. So if a tax hike is to be justified, there must be clearer evidence that it will be worthwhile.
Mr. Sanders’ third premise is correct; we indeed spend far more on health care than any other developed nation with less to show for it. This is due to the patchwork of overlapping public and private health-care programs we have laid atop one another. To name but a few: Medicare, Medicaid, the Veterans Health Administration, TRICARE, the State Children’s Health Insurance Program, private insurance via Obamacare, employer-sponsored private insurance—and on and on. Each of these programs, moreover, interact with hospitals, state laws, federal laws, tax incentives, employers, and insurers in their own unique ways. The result is a hopelessly complex jumble riddled with inefficiencies and skewed incentives, sending health-care prices skyward.
So tear it all down and substitute in one big, comprehensive federal system, argues Mr. Sanders. That would be a mistake. For one, the transition period would be unimaginably turbulent, as Americans long enrolled in public or private plans are forcibly shifted onto a prescribed government plan. Mr. Obama’s ill-fated promise that “if you like your plan, you can keep your plan” would be fully out of the question.
Moreover, millions of health-insurance plans switching from privately bought to publicly funded could cause significant unemployment as hospitals close down and reopen, the result of a massive reallocation of resources. Doctors and nurses would almost certainly face a pay cut—as they did under Obamacare—reducing the incentive to enter the medical field and exacerbating America’s gaping doctor shortage.
Single-payer health insurance runs the risk of rationing. With health care now accessible free of charge, there would exist little incentive to not go and get care, even for the tiniest symptom. But no health system has the capacity to endure that much additional strain. In response, hospitals and clinics could begin to pick and choose who deserves care and who doesn’t. The result would be painfully long wait times, as is the case with Canada’s single-payer system. After the implementation of Obamacare, health care is largely rationed on a price basis, similar to other services. There are real questions of equity that can and should be addressed, but nationalizing health insurance is not the way to do it.
It is also worth questioning the assumption that single-payer would necessarily reduce costs. Mr. Sanders’ recent Medicare for All Act explored neither of the two ways other nations with large public health-insurance schemes keep costs down—by limiting certain benefits, like vision or dental care, or by requiring per-visit co-payments. The Medicare for All Act does neither of these. While no rigorous cost estimates have yet been run, it seems likely that the putative cost-reduction power of a single-payer system—the government negotiating health-care costs with hospitals—would not be realized.
All of this is to say that single-payer health care is a bad idea. Yet the 14 Democratic co-sponsors of Mr. Sanders’ single-payer package, including 2020 presidential hopefuls Cory Booker and Elizabeth Warren, would disagree. Although his 2016 presidential campaign was unsuccessful, Mr. Sanders has nonetheless moved the conversation to the left, with a voting population increasingly disposed to liking single-payer.
This shift is as much the product of Republicans as it is Democrats. Vox’s Ezra Klein has convincingly argued that the Republicans’ botched Obamacare-repeal effort opened the door for single-payer by discrediting both themselves and center-left Democrats. What remains are only hard-left Democrats like Mr. Sanders, single-payer plans at the ready. One could envision a Democratic wave in 2020, promptly followed by the Medicare for All Act being shoved through Congress via budget reconciliation (which allows bills to pass with lower vote thresholds). Republicans would be powerless to stymie the effort, and center-left Democrats powerless to resist.
The Democrats’ leftward lurch would hurt them, and the country, in the long run. For all the reasons laid out above, single-payer is not effective policy, even if the short-term politics are attractive. But as the weaknesses of the system became clear, voters would revolt, punishing the party who heaved it upon them. To ensure their long-term political viability, Democrats should leave Mr. Sanders alone—and move decisively and unapologetically to the center.
